EXPONENTIAL GROWTH IN WEALTH

Exponential growth in finance refers to the compounding of interest or returns over time, where the growth rate increases over time due to reinvestment of earnings.

For example, if you invest $1,000 in a savings account that pays 5% interest per year, after one year, you would earn $50 in interest, for a total of $1,050. If you leave that $1,050 in the account and earn another 5% interest the next year, you would earn $52.50 in interest, for a total of $1,102.50. Over time, this compounding effect can lead to significant growth in your initial investment.

Exponential growth can also occur in the stock market, where a company's earnings may increase over time, leading to an increase in the stock's price. If you reinvest the dividends you receive from the stock, your investment can grow exponentially over time.

It's important to note that exponential growth can work both ways, and losses can also compound over time. It's important to understand the risks involved in any investment and to diversify your portfolio to manage risk.

If I made 10% each week on a $1000 investment, how much would I have after 1 year, 3 years, 5 years and 10 years if I reinvested all the profit each week?

Assuming that the 10% return is weekly and compounded weekly, we can use the following formula to calculate the future value of the investment:

FV = PV x (1 + r)^n

Where:

FV = future value

PV = present value (initial investment)

r = weekly interest rate (10% / 52 = 0.1923%)

n = number of weeks

After 1 year (52 weeks):

FV = $1000 x (1 + 0.1923%)^(52 x 1)

FV = $8,263.16

After 3 years (156 weeks):

FV = $1000 x (1 + 0.1923%)^(52 x 3)

FV = $68,091.78

After 5 years (260 weeks):

FV = $1000 x (1 + 0.1923%)^(52 x 5)

FV = $562,239.64

After 10 years (520 weeks):

FV = $1000 x (1 + 0.1923%)^(52 x 10)

FV = $1,873,854.53

Please note that these calculations assume a consistent 10% weekly return over the specified time periods, which may not be realistic or achievable in practice. Additionally, investing always carries some risk, and past performance does not guarantee future results.

What about if it was 10% a month?

If the return is 10% per month and compounded monthly, we can use the following formula to calculate the future value of the investment:

FV = PV x (1 + r)^n

Where:

FV = future value

PV = present value (initial investment)

r = monthly interest rate (10% / 12 = 0.8333%)

n = number of months

After 1 year (12 months):

FV = $1000 x (1 + 0.8333%)^(12 x 1)

FV = $3,138.43

After 3 years (36 months):

FV = $1000 x (1 + 0.8333%)^(12 x 3)

FV = $12,791.32

After 5 years (60 months):

FV = $1000 x (1 + 0.8333%)^(12 x 5)

FV = $52,226.39

After 10 years (120 months):

FV = $1000 x (1 + 0.8333%)^(12 x 10)

FV = $456,037.17

Again, please note that these calculations assume a consistent 10% monthly return over the specified time periods, which may not be realistic or achievable in practice. Additionally, investing always carries some risk, and past performance does not guarantee future results.

What about if it was 10% every 3 months?

If the return is 10% every 3 months and compounded quarterly, we can use the following formula to calculate the future value of the investment:

FV = PV x (1 + r)^n

Where:

FV = future value

PV = present value (initial investment)

r = quarterly interest rate (10% / 4 = 2.5%)

n = number of quarters

After 1 year (4 quarters):

FV = $1000 x (1 + 2.5%)^(4 x 1)

FV = $3,314.08

After 3 years (12 quarters):

FV = $1000 x (1 + 2.5%)^(4 x 3)

FV = $12,596.98

After 5 years (20 quarters):

FV = $1000 x (1 + 2.5%)^(4 x 5)

FV = $31,441.75

After 10 years (40 quarters):

FV = $1000 x (1 + 2.5%)^(4 x 10)

FV = $112,841.32

Again, please note that these calculations assume a consistent 10% return every 3 months over the specified time periods, which may not be realistic or achievable in practice. Additionally, investing always carries some risk, and past performance does not guarantee future results.

Every 6 months?

If the return is 10% every 6 months and compounded semi-annually, we can use the following formula to calculate the future value of the investment:

FV = PV x (1 + r)^n

Where:

FV = future value

PV = present value (initial investment)

r = semi-annual interest rate (10% / 2 = 5%)

n = number of semi-annual periods

After 1 year (2 semi-annual periods):

FV = $1000 x (1 + 5%)^(2 x 1)

FV = $1,102.50

After 3 years (6 semi-annual periods):

FV = $1000 x (1 + 5%)^(2 x 3)

FV = $1,331.00

After 5 years (10 semi-annual periods):

FV = $1000 x (1 + 5%)^(2 x 5)

FV = $1,611.87

After 10 years (20 semi-annual periods):

FV = $1000 x (1 + 5%)^(2 x 10)

FV = $2,653.30

Again, please note that these calculations assume a consistent 10% return every 6 months over the specified time periods, which may not be realistic or achievable in practice. Additionally, investing always carries some risk, and past performance does not guarantee future results.

What about if I make a 100% return each year?

If you make a 100% return each year and reinvest all profits, the future value of your investment can be calculated as follows:

After 1 year:

FV = $1000 x (1 + 100%)^1

FV = $2,000.00

After 3 years:

FV = $1000 x (1 + 100%)^3

FV = $8,000.00

After 5 years:

FV = $1000 x (1 + 100%)^5

FV = $32,000.00

After 10 years:

FV = $1000 x (1 + 100%)^10

FV = $1,024,000.00

It's important to note that a 100% return each year is an exceptional growth rate and it may be difficult to achieve in practice. Additionally, investing always carries some risk, and past performance does not guarantee future results.

How much is 100% gain per year when divided between 12 months and 52 weeks?

To calculate the monthly and weekly equivalent rates of a 100% gain per year, we can use the following formulas:

Monthly rate = ((1 + annual rate)^(1/12)) - 1

Weekly rate = ((1 + annual rate)^(1/52)) - 1

Using these formulas with an annual rate of 100%, we get:

Monthly rate = ((1 + 100%)^(1/12)) - 1 = 6.17%

Weekly rate = ((1 + 100%)^(1/52)) - 1 = 1.84%

Therefore, if you make a 100% gain per year and divide it equally among the 12 months or 52 weeks, your equivalent monthly return would be approximately 6.17% and your equivalent weekly return would be approximately 1.84%. It's important to note that these are hypothetical rates and may not be achievable in practice, and investing always carries some risk.

100% return year upon year could net you $1,024,000.00 in a decade and you don’t need to take any huge risks, simply making 1.84% per week or 6.17% (not forgetting fees, and tax) would be sufficient to compound your growth over time. Quit looking for those 1000x crypto gains and take a rational approach of consistent small gains…very much the same way I approach health, training and dietary protocols.